PwC finally names partners in tax leak scandal as ASIC reviews contracts
The accounting and advisory giant has named four former partners who received tax leak emails - with one quitting his current job almost immediately.
PwC Australia has named four former partners involved in its tax leak scandal after responding to a Senate inquiry’s request with a list of 63 current and former staff who received at least one email with details of confidential government information.
The disclosure almost immediately led to the departure of one of the former PwC partners named from his current job at legal firm DLA Piper.
In an email to staff on Monday, acting chief executive Kristin Stubbins said the embattled accounting and advisory firm had on Friday also revealed to the inquiry the names of the nine partners that had been put on leave last week.
“In response to the Senate questions, we provided the requested names of those involved in the confidentiality breaches as well as the names of partners who were directed to go on leave pending the outcome of our investigation related to the confidentiality breaches,” she said in the email.
PwC is expected to face a Senate inquiry this week following revelations its former head of international tax, Peter Collins, shared confidential government tax briefings about plans to bring in multinational anti-tax-avoidance laws with other members of the firm.
The firm has not yet been called to appear, but on Friday it responded to questions on notice from Greens senator Barbara Pocock asking for the names.
“The four former partners include Michael Bersten, Peter Collins, Neil Fuller and Paul McNab. Tom Seymour no longer has any role in our firm, and we will take appropriate action for these individuals when our investigation is complete,” Ms Stubbins said in the email. “We’ve reached out to all 63 individuals over the weekend to explain the situation.”
Ms Stubbins replaced Mr Seymour after he confirmed he was linked to the tax leaks scandal in May. She told staff the firm was working “as quickly as possible” to determine those responsible.
For months, the firm has been accused of obfuscation and not fully acknowledging the severity of the situation, but on Monday it said it had finally provided some clear answers.
“We’ve heard the calls from our stakeholders to release the names of those who were responsible for confidentiality breaches, and we’ve been working as quickly as possible to determine that and to disclose these names to the Senate per their request, and we have now done so.”
PwC asked the Senate not to reveal the names, as some of those people were part of two distribution lists receiving emails that did not indicate the information was confidential. “For that reason, it would be unfair for those names to be released,” she said.
Mr McNab, one of the former partners named in Ms Stubbins email who until Monday was working as a tax dispute resolution partner at DLA Piper, left his position shortly after his name was made public by Ms Stubbins.
A spokesman for Mr McNab said he had decided to do “the honourable thing”.
“This issue is high-profile in the media and Mr McNab has decided to act in the best interests of the firm,” he said.
A spokesman for DLA Piper did not respond to requests for comment.
In a post on LinkedIn, Mr McNab said he had not been involved in any “Treasury consultations regarding the Multinational Anti Tax Avoidance where confidential information was discussed.”
“It is noteworthy that the firm has taken this action to name former partners only,” he said.
“I trusted that the information shared with me as a partner of the firm would comply with any confidentiality agreements that may have been in place with Treasury.”
Mr Bersten left PwC in July 2018 and became a barrister, his LinkedIn profile shows, while Mr Fuller reportedly retired in 2019 after 31 years at the firm.
Senator Pocock said she hoped PwC’s responses would be made public, but the decision was for the Senate committee, which resumes hearings on Tuesday.
“I have said before that the names of all PwC operatives involved should be released as soon as possible and that PwC needs to make clear the nature of the role that each person on the list has played in the tax avoidance scheme,” she said.
“It is important to ensure that those who are not responsible for any wrongdoing do not suffer any adverse repercussions. The onus is now on PwC to come clean with the Australian public and hand over this information.”
Meanwhile, the Australian Securities & Investments Commission said it would review all of its contracts with PwC. Several government bodies, regulators and commercial clients have halted work with the embattled firm.
“The Commonwealth is perfectly entitled to be very concerned, very disturbed by these developments,” ASIC chair Joe Longo said at a conference in Sydney.
He said the regulator wanted to satisfy itself that confidentiality agreements with PwC were being observed, and said the firm needed to be held accountable.
“Accountability, then trust and confidence can be restored. But until that happens, I think many of us will find it very difficult to have a normal commercial relationship with PwC.”
“Of course, like everyone else, we’ll be reviewing those (contracts),” he said, adding he didn’t know what the cost of those contracts were to ASIC, but said the regulator expected they would be allowed to continue until the end of their term.
“PwC are obviously one of four globally significant service providers. They provide the broadest range of consulting, accounting and auditing services,” Mr Longo said.
“They’re an important part of our economy and they need to be held accountable for this extraordinary incident – a very serious breach of trust”
The matter was referred to the Australian Federal Police by Treasury last month. The Department of Finance has told staff to consider confidentiality breaches when evaluating new work assignments to professional services firms.
The Reserve Bank of Australia last week said it would not work with PwC again until the firm revealed the names of those involved in the scandal.
Australia’s biggest superannuation fund, AustralianSuper, also put a halt on PwC, saying it had frozen any new contracts with the firm and was putting its audit work contract up for review, noting its leadership had “expressed these concerns at the highest level to PwC”.
On Monday, Mr Longo said the process of accountability was “clearly... only just starting”. “We would all hope, that will lead to some restoration of trust and confidence.”
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